In healthy males, testosterone is produced primarily by the testes and in small amounts by the adrenal glands. Most of the testosterone is transported bound to a specific plasma protein called sex hormone binding globulin (SHBG). This protein is produced in the liver and carries the sex hormones (androgens in males and estrogens in females) to their site of action in the body.

The testosterone that does not bind to SHBG is termed free testosterone and it is this testosterone that can be converted to dihydrotestosterone (DHT) by the enzyme 5-alpha reductase. Both DHT and testosterone can bind to the androgen receptor but DHT binds with a greater affinity than unbound or unchanged testosterone.

Once bound to the androgen receptor, DHT or testosterone forms a complex that undergoes a structural change. This complex then moves into the nucleus of the cell and binds to specific nucleotide sequences of DNA called hormone response elements. This binding of the complex to the elements brings about changes in the transcription of various proteins mediated by specific genes, which produces the androgenic effects.

DHT promotes growth of the male sexual characteristics including the penis, testes and scrotum as well as the pubic hair and body hair. This hormone also promotes growth of the prostate. The conversion of testosterone to DHT is therefore essential to ensuring healthy sexual development and function in males.

Finasteride acts by inhibiting the 5-alpha reductase enzyme that converts testosterone to DHT, specifically the type II 5-alpha reductase enzyme.

Finasteride is used to treat a condition of the prostate called benign prostatic hyperplasia, also called prostate enlargement. Since DHT stimulates growth of the prostate, finsateride helps reduce the prostate size by blocking the conversion of testosterone to DHT and lowering the blood and tissue levels of this hormone. Symptoms associated with benign prostatic hyperplasia that may improve with finasteride treatment include difficulty urinating, increased urination frequency and decreased urinary flow. The FDA approved finasteride dose for treating this condition is 5 mg per day.  

Finasteride (1 mg per day) has also been shown to benefit men with mild to moderate hair loss. In men, DHT is required for initiation and progression of follicular miniaturization as well as the destruction of hair follicles that is seen in male pattern baldness. The administration of finasteride therefore prevents this hair follicle destruction and baldness by reducing the amount of circulating DHT.